Fico or credit score
FICO® scores vs. credit scores: What’s the difference?
In a Nutshell
We think it’s important for you to understand how we make money. It’s pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials.
Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That’s why we provide features like your Approval Odds and savings estimates.
FICO® scores are commonly used by lenders, but other credit scores can also give you a good idea of where you stand.
What’s in my credit reports?
Your credit reports are records of your past dealings with creditors and other credit history. They include information such as your name, addresses, employers, the history and status of various credit accounts, and inquiries from companies checking your reports. If applicable, you’ll also find information from public records, such as bankruptcies, tax liens and civil judgments.
Here are some things to know about your scores — whether you get your FICO® credit scores from your credit card or bank, your free VantageScore® credit scores from Equifax and TransUnion on Credit Karma, or your scores from a different source.
The rundown on FICO® scores vs. other credit scores
Things to know about FICO® scores
Lenders started using FICO® scores, created by Fair Isaac Corporation, in 1989, and the scoring models have been updated several times since. According to FICO, more than 90% of top lenders use FICO® scores. In addition to its base versions, FICO also offers industry-specific scoring models (and scores) for distinct credit products, such as auto loans, credit cards and mortgages.
- Payment history: 35%
- Amounts owed: 30%
- Length of credit history: 15%
- New credit: 10%
- Credit mix: 10%
- Exceptional: 800+
- Very good: 740 to 799
- Good: 670 to 739
- Fair: 580 to 669
- Poor: 579 and below
Things to know about VantageScore
VantageScore Solutions was created in 2006 as a joint venture of the three major consumer credit bureaus: Equifax, Experian and TransUnion. There are four VantageScore® models, and the latest, VantageScore® 4.0, uses a range of 300 to 850.
“Data scientists don’t build a model and then just stick it on the shelf,” says Jeff Richardson, vice president of communications and public relations at VantageScore. “They’re continually testing and validating it. If there are new modeling technologies and techniques that are available or if the data changes or improves, they’ll update their models accordingly.”
FICO requires that you have at least one account opened for six months or more and at least one account reported to the credit bureaus within the previous six months to get your scores (and no indication on your credit reports of being deceased).
- Payment history: extremely influential
- Age and type of credit: highly influential
- Percentage of credit limit used: highly influential
- Total balances and debt: moderately influential
- Recent credit behavior and inquiries: less influential
- Available credit: less influential
Pretty similar to the factors that FICO evaluates, right?
What you should know about proprietary scoring models
In addition to the FICO® and VantageScore® credit scores, each of the three national consumer credit bureaus offers its own proprietary credit scores. Because lenders typically don’t use these scores when making credit decisions, they’re often called “educational scores.”
Which credit scores does Credit Karma offer?
While VantageScore® credit scores aren’t used as widely as FICO® scores for credit decisions, they can still give you a good idea of where your credit stands. Remember, the VantageScore® model incorporates many of the same factors that are used when calculating your FICO® scores, although it may assign a different weight to certain factors.
Credit Karma shows you the different credit factors that can affect your scores and where you can work to try to improve your credit. And if you opt for credit monitoring, Credit Karma will also send you alerts when there are important changes to your credit reports, which may help you spot potential errors or fraud. Using a service like this can give you tools to help you improve your credit.
No matter what scores you look at, most do a good job of giving you an idea of the state of your credit. Staying on top of your credit scores can help you determine where you stand and steps you can take to improve your credit health.